Saudi-Arabien Wirtschaftshandbuch Saudi Arabia Business ... - Ghorfa

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GoAlS of the 8 th fIve-yeAr PlAn
(2005-2009)
The political leadership under King Abdullah has recognised
that only consistent structural reforms can
achieve the necessary modernisation of the economy. The
politico-economic concept followed by the Saudi government
forms the basis for the 8 th five-year plan that was
commenced in 2005. The main goals of this plan are the
further improvement of the standard of living and the
creation of jobs for all Saudi citizens if possible. The focal
points of the plan concentrate on more participation by
women in the business world and the creation of better
employment options for women. Also, the role of the family
in the Saudi society will be further underscored.
The continuous development of the infrastructure and
the service sector is planned to coincide with the growing
needs of the manufacturing operations. The plan demands
more effort to be exerted to secure a balanced budget
and a stable balance of payments to keep inflation at its
previously low level. The development of comprehensive
cooperation with all economic blocks and with the Arab
and Islamic states, in particular with those within the Gulf
Cooperation Council, aims to further integrate Saudi
Arabia into the global economy.
In the five years of the 8 th plan, the goal is to ensure that
the GDP is raised nominally from 715 billion US$
(2004) to 900 billion US$ (2009) which equates to a
growth rate of 4.6%. This rate of growth is also reflected
in the development of the pro capita income that will be
increase nominally from 11,533 US$ (2004) to 12,853
SR (2009). This level was already exceed in 2005. The
projected growth in income is also an indicator of the
targeted increase in the standard of living of the Saudi
population. A significant factor for realising the industrial
diversification strategy is that the percentage of the
oil and gas sector in the gross domestic product will be
further reduced from 27.5% to 24.9% during the term of
the plan.
To ensure the planned economic growth, the investment
volume needs to grow on average 10.7% every year until
2009, which means that the investments should reach a
volume of 27.3% of the GDP in 2009 compared to 20.5%
of the GDP in 2004. The focus here is on increasing productive
private investments in sectors such as the petrochemical
industry, mining, manufacturing, building materials
production and water treatment and desalination.
The targeted acceleration of the privatization plans also
aims to contribute to promoting direct private investment
which is planned to increase every year by an average
10.4% by 2009 thereby reaching 74.3% of the total
investments.
The planned economic growth and the associated intensification
of the investment work in connection with improvements
to the professional further occupational training
system aims to better the job market opportunities for
young Saudis. Around 90% of all Saudis are still directly
or indirectly dependent on a state income. In contrast,
90% of the jobs in private companies are held by foreigners.
Due to the high population growth, approx. 660,000
workers enter the labour market every year (around 50%
of the Saudis are younger than 16 years of age).
The unemployment rate is currently estimated to be
15%. In April 2006, a new labour law was passed which
defines the scope of the restructuring process, allows the
6.5 million guest workers to be replaced with Saudi nationals.
Regardless of the industry, the companies have a
duty to increase the percentage of domestic workers up
to 75%. Foreign companies see this ruling as an obstacle
to investment.
The plan states that the new Saudi workers flooding onto
the labour market will receive 1.08 million jobs which
means that 89% of the needs would be covered. The other
job opportunities will absorb 48% of the existing unemployed
persons. In this way, the unemployment rate will
be drastically reduced by 2009.
There is also a special focus on the development of the
health system and other social areas. There are plans to
raise the number of public hospitals from 194 at the end
of 2003 to 248 by 2009 and thereby increase the number
of available beds from 28,522 to 34,722. The number of